If Qualcomm wants to do the sales (probably a large part of their business) I can see how this would be important. The thing is, ZTE - like many Chinese companies - has to start recognizing international property law which is why they got banned in the first place.

“The thing is, ZTE - like many Chinese companies - has to start recognizing international property law which is why they got banned in the first place.”

ZTE’s not an IP offender that I know of. The big IP offender is Huawei. ZTE buys significant amounts of parts from American vendors, vs Huawei, which tries to build in-house. ZTE traded with Iran and NK, was fined ~$1b and required to punish the personnel who did the deals. ZTE not only did not punish these people - it rewarded them with cash bonuses.

6
posted on 05/13/2018 1:01:08 PM PDT
by Zhang Fei
(Journalism is about covering important stories. With a pillow, until they stop moving.)

“So is this Trump helping bail out ZTE in exchange for China stepping back from Iran and NK?”

It’s also possible that this is overkill on the part of regulators. ZTE buys $2b a year worth of parts from American vendors. This ruling will lead some non-American equipment manufacturers to source from non-American vendors, where possible. It’s a risky ploy.

What if China decided that any supplier with operations in China must stop supplying Apple? They could literally shut down Apple. Note that the impact on China’s economy wouldn’t be particularly significant, because these are all low level assembly jobs, and most of Apple’s suppliers are non-Chinese companies where most of the value-added (the design jobs) isn’t tacked on in China. But Apple would be up the creek, because all of its tooling (technically FoxConn’s) would be marooned in China with no hope of being moved out, because of Chinese regulations.

8
posted on 05/13/2018 1:27:09 PM PDT
by Zhang Fei
(Journalism is about covering important stories. With a pillow, until they stop moving.)

“So is this Trump helping bail out ZTE in exchange for China stepping back from Iran and NK?”

Bottom line here is that with a lot of high-value ZTE jobs at stake, it wouldn’t surprise me if the Chinese threatened to lower the boom on Apple. At minimum, they could erase Apple’s Chinese sales, which amount to $50b. Given that almost all assembly is done in China, they could literally shut Apple down for several quarters. My guess is that between being shut out of China and the cessation of Chinese production, Apple could suffer a decline of $100b (~40%) in sales vs last year’s numbers. And the purchase of tooling on an emergency basis from non-Chinese sources, as well as the establishment of a new production base in a low cost labor country would probably cost tens of billions of dollars. In other words, Apple could see its earnings drop from $50b in 2017 to zero this year. That’s a lot of simoleons.

11
posted on 05/13/2018 2:04:41 PM PDT
by Zhang Fei
(Journalism is about covering important stories. With a pillow, until they stop moving.)

Hahahah. You all give God like attributes to the Chinese. You think they want all their high tech jobs to go away? You think that won’t ultimately be hugely damaging to their tenuous grip on power? The Chinese are not immune from uprisings. Just from the small bit that I read ZTE will come back under very different rules and will be true players going forward. Trump doesn’t tweet out of fear

What if China decided that any supplier with operations in China must stop supplying Apple?

Won't happen. Apple contracts through several companies, most notably FoxConn, which is a Taiwanese company which has factories everywhere, not just in China. And FoxConn makes products for hundreds of companies, not just Apple. If China targeted FoxConn, it would hurt hundreds of tech companies but Apple would survive as Apple builds many of its own components here in the USA as well as abroad. Apple has made a major push to manufacture more components in the USA, more so than most companies.

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